Chapter

Financial Accounting
Demo 04: Journal Entries & Ledger Posting &
T.B.-Rizvi Consultants

Masud Jahan
Department of Science and Humanities
Military Institute of Science and Technology
Demonstration Problem

To illustrate how to
prepare journal entries
& ledger posting .

DP1
HUM 279: Principles of Accounting 2/30
 Let’s prepare some journal entries and post them
to the ledger.
Rizvi formed a management consulting firm specializing in cost
management systems. Below are the transactions that occurred
during the initial month of operation.
June 2- Rizvi invested $25,000 cash in the capital stock of the newly formed
corporation.
June 3- Hired an administrative assistant, to be paid $3,000 per month. Leased
office space at the rate of $1,000 per month. Signed a
contract with Sohel to deliver consulting services valued at $7,500.
June 8- Purchased (and immediately used) office supplies on account for $750.
June 9- Received $2,500 from Sohel for work performed to date.
June 15- Paid $1,200 for travel costs associated with consultation work.

3/30
 Let’s prepare some journal entries and post them
to the ledger.
Rizvi formed a management consulting firm specializing in cost
management systems. Below are the transactions that occurred
during the initial month of operation.
June 16- Provided services on account to Shahed for $3,000.
June 17- Paid $1,500 to administrative assistant for salary.
June 23- Billed Farid for $4,000 consulting engagement performed.
June 25- The company paid Rizvi a $1,000 dividend.
June 26- Collected 50% of the amount due for the billing on June 23.
June 27- Paid $750 on the open account relating to the June 8 purchase.
June 28- Completed the Sohel job and billed the remaining amount.
June 30- Paid $1,500 to administrative assistant for salary.
June 30- Paid rent for June, $1,000.
HUM 279: Principles of Accounting 4/30
June 2- Rizvi invested $25,000 cash in the capital
stock of the newly formed corporation.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 2 Cash 25,000
Capital Stock 25,000
Rizvi invested $25,000 cash in the
capital stock of the newly formed
corporation.

5/30
June 3- a. Hired an administrative assistant, to be paid
$3,000 per month; b. Leased office space at the rate of
$1,000 per month; c. Signed a contract with Sohel to
deliver consulting services valued at $7,500.

No transaction occurred

6/30
June 8- Purchased (and immediately used) office
supplies on account for $750.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 8 Supplies Expense 750
Accounts Payable 750

Purchased (and immediately used)

office supplies on account for $750.

7/30
June 9- Received $2,500 from Sohel for work
performed to date.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 9 Cash 2,500
Service Revenues 2,500

Received $2,500 from Sohel for work

performed to date.

8/30
June 15- Paid $1,200 for travel costs associated
with consultation work.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 15 Travel Expense 1,200
Cash 1,200

Paid $1,200 for travel costs associated

with consultation work.

9/30
June 16- Provided services on account to Shahed
for $3,000.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 16 Accounts Receivable 3,000
Service Revenues 3,000

Provided services on account to Shahed

for $3,000.

10/30
June 17- Paid $1,500 to administrative assistant for
salary.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 17 Salary Expense 1,500
Cash 1,500

Paid $1,500 to administrative assistant

for salary.

11/30
June 23- Billed Rishad for $4,000 consulting
engagement performed.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 23 Accounts Receivable 4,000
Service Revenues 4,000

Billed Rishad for $4,000 consulting

engagement performed.

12/30
June 25- The company paid Rizvi a $1,000
dividend.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 25 Dividend 1,000
Cash 1,000

The company paid Rizvi a $1,000

dividend.

13/30
June 26- Collected 50% of the amount due for the
billing on June 23.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 26 Cash 2,000
Accounts Receivable 2,000
Collected 50% of the amount due for the
billing on June 23. ($4,000 x 50% =
$2,000)

14/30
June 27- Paid $750 on the open account relating to
the June 8 purchase.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 27 Accounts Payable 750
Cash 750

Paid $750 on the open account relating

to the June 8 purchase.

15/30
June 28- Completed the Shohel job and billed the
remaining amount.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 28 Accounts Receivable 5,000
Service Revenues 5,000

Completed the Shohel job and billed the

remaining amount (7500-2500).

16/30
June 30- Paid $1,500 to administrative assistant for
salary.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 30 Salary Expense 1,500
Cash 1,500

Paid $1,500 to administrative assistant

for salary.

17/30
June 30- Paid rent for June, $1,000.

GENERAL JOURNAL
Date Account Titles & Explanations Debit Credit
June 30 Rent Expense 1,000
Cash 1,000

Paid rent for June, $1,000.

18/30
CAPITAL STOCK A/C

CAPITAL STOCK
June 2 25,000
Balance 25,000

19/30
DIVIDENDS A/C

DIVIDENDS
June 25 1000
Balance 1000

20/30
SERVICE REVENUES A/C

SERVICE REVENUES
June 9 2,500
June 16 3,000
June 23 4,000
June 28 5,000
Balance 14,500

21/30
SALARIES EXPENSE A/C

SALARIES EXPENSE
June 17 1,500
June 30 1,500
Balance 3000

22/30
RENT EXPENSE A/C

RENT EXPENSE
June 30 1,000
Balance 1,000

23/30
TRAVEL EXPENSE A/C

TRAVEL EXPENSE
June 15 1,200
Balance 1,200

24/30
SUPPLIES EXPENSE A/C

SUPPLIES EXPENSE
June 8 750
Balance 750

25/30
ACCOUNTS RECEIVABLE A/C

ACCOUNTS RECEIVABLE
Jun/16 3,000 Jun/26 2,000
Jun/23 4,000
Jun/28 5,000
12,000 2,000
(2,000)
Balance 10,000

26/30
ACCOINTS PAYABLE A/C

ACCOUNTS PAYABLE
Jun-27 750 Jun-08 750

27/30
CASH A/C
CASH
Jun-02 25,000 Jun-15 1200
Jun-09 2,500 Jun-17 1500
Jun-26 2000 Jun-25 1000
Jun-27 750
Jun-30 1500
Jun-30 1000
29500 6950
(6950)
Balance 22550

28/30
Let’s prepare the trial balance for
Rizvi Consultants

29/30
 Rizvi Consultants
Trial Balance
30-Jun-08
Account Titles Debits Credits
Cash $22,550 -
Accounts Receivable 10,000 -
Accounts Payable - -
Capital Stock - $25,000
Service Revenues - 14,500
Salary Expense 3,000 -
Rent Expense 1,000 -
Travel Expense 1,200 -
Supplies Expense 750 -
Dividends 1,000 -
Total $39,500 $39,500

30/30
End of Demo 04
THANK YOU ALL…